CLIMATE AUCTIONS A Market-Based Approach to National Climate Action INTRODUCTION With the Paris Agreement and most of its detailed This is not an untested concept. Climate auctions have rulebook now finalized, countries and subnational been piloted successfully at both the international and actors face the challenge of translating climate targets national levels, and in the era of NDC implementation, and strategies into action and determining how to they also represent an effective tool to raise climate finance these actions. There is a particular need for ambition. While most countries have outlined priority innovative approaches to deliver finance at the scale sectors in their NDCs, many are still identifying specific and pace necessary to limit global temperature rise mitigation activities as well as finance needs and to well below 2°C. However, evidence is growing that strategies. 3 Climate auctions can support countries up-front grants and loans—the dominant instruments in developing a pipeline of bankable, cost-effective for allocating limited public concessional funding for projects for meeting climate targets, while also climate mitigation—are not optimal to support large- attracting limited international public funding. For scale decarbonization. As the recent special report countries seeking to raise their NDC ambition, climate of the Intergovernmental Panel on Climate Change auctions offer a stepping-stone to carbon pricing has highlighted, climate auctions represent one of the and regulation. most promising new approaches to mobilize finance in support of Nationally Determined Contributions This brief explores why climate auctions are an (NDCs).1 This policy brief presents ways in which effective tool for achieving climate outcomes, climate auctions can be applied at the national level focusing on how developing country policymakers to cost-effectively support countries in achieving their can utilize auctions to accelerate NDC climate targets. implementation and raise climate ambition. It then outlines how climate auctions work and where they For decades, public funders have relied primarily are most effective in achieving climate outcomes. on grants and loans to allocate public subsidies for climate and development projects internationally. However, these instruments can be costly to administer, deficient at leveraging private investment, and often unsuccessful in delivering intended results. Climate auctions—a 21st-century alternative— competitively allocate public funding to commercially developed mitigation projects, ensuring both transparency in selection processes and efficiency in leveraging investment. Climate auctions offer successful project developers and commercial entities a guaranteed price for verified emission reductions, which these entities can then use to raise additional finance. In addition, climate auctions only disburse funding upon delivery of mitigation results, reducing the risk for the taxpayer. At a national level, climate auctions can help countries achieve their NDCs and other climate targets in the short term while supporting carbon pricing and greater climate ambition in the medium to long term.2 2 | THE WORLD BANK WHY CLIMATE AUCTIONS Climate auctions resolve challenges for national build capacity and make the necessary investments policymakers seeking to achieve their climate targets, before they are subject to carbon pricing or mandatory for international and domestic public funders seeking abatement policies. In some cases, repeated auctions to effectively allocate limited resources for climate and greater uptake of mitigation activities will also drive outcomes, and for project developers and commercial down the cost of the mitigation technology, paving the entities seeking to invest in clean technologies. way for further investments and decreased compliance costs in a future carbon pricing or regulatory scheme. Finally, auctions can also send a price signal to NATIONAL POLICYMAKERS policymakers seeking to design effective carbon pricing Climate auctions can help national policymakers or other emissions regulations. achieve mitigation results in line with their NDCs, while also laying the groundwork for increased climate Third, climate auctions can leverage and strengthen ambition over time. Specifically, climate auctions provide market infrastructure, where applicable, to catalyze direct incentives to kick-start mitigation investments in and produce emission reductions for achieving key sectors. As auctions rely on limited public funding, climate targets. Irrespective of the evolution of they can also serve as a bridge to implement carbon future emissions trading schemes, using existing pricing or other regulations, which can be crucial for government focal points and globally agreed unlocking economy-wide climate action. methodologies for calculating and verifying emission reductions bypasses the need to design monitoring Climate auctions can facilitate NDC implementation and evaluation systems from the ground up. Under in four ways: the Clean Development Mechanism (CDM), 106 First, by providing direct support to close cost viability developing and emerging economies established gaps and de-risk investments, climate auctions can national authorities for coordinating, approving, and attract commercial entities to undertake mitigation verifying the results of projects that generate carbon projects. Leveraging the private sector’s strength offsets.4 In addition, the CDM and other international in seeking out and structuring bankable and cost- carbon market offset systems, including the Verified effective projects helps national policymakers build Carbon Standard (VCS), Gold Standard (GS), and viable project pipelines to implement their NDCs. The Climate Action Reserve (CAR), have generated pipeline of bankable projects identified through the methodologies for measuring mitigation results across auction process extends beyond auction winners and a range of sectors, offering ready-made systems for can be utilized for further results under subsequent monitoring, reporting, and verifying results under a carbon pricing policies. By engaging the private sector, climate auction scheme. Climate auctions can also climate auctions also contribute to developing an strengthen carbon market infrastructure (e.g., by ecosystem of support for mitigation activities. utilizing verification agents that confirm reductions have occurred), further laying the necessary Second, climate auctions can help build private groundwork for introducing more economy-wide sector capacity and willingness to engage in carbon carbon pricing policies. pricing schemes. In some sectors, introducing effective carbon pricing or other regulatory policies Fourth, while retaining the strengths of a market- may be difficult due to industry opposition. In the based mechanism, climate auctions can align with short term, climate auctions provide a direct incentive and channel support for national development. For to stimulate investments in these difficult sectors. example, countries can choose to hold an auction This initial support provides industries the chance to covering specific subsectors or technologies, CLIMATE AUCTIONS | 3 WHY CLIMATE AUCTIONS thus directing commercial investment into areas Having selected recipients, public funders must prioritized for economic development. The projects also determine the right level of subsidy to achieve supported through climate auctions can also result climate or development results without crowding out in other development outcomes, like local enterprise private investment.5 To do so, public funders typically development, job creation, or health benefits. make a case-by-case determination of the level of support needed to make projects commercially attractive while minimizing public outlays. Setting PUBLIC FUNDERS: the public subsidy at an appropriate level is resource INTERNATIONAL AND DOMESTIC intensive, and funders looking across a portfolio of Public funders play a critical role in de-risking climate grants they provided for climate mitigation would investments and supporting projects that may not yet have difficulty assessing whether they truly delivered be commercially viable.i However, public funders also the best value for their money. Climate auctions, face the challenge of determining how best to use their through competitive tendering, transparently reveal limited resources to help countries achieve their NDCs the minimum amount of finance required to make a and other climate goals. To maximize impact, public mitigation project commercially viable. Finally, climate funders must 1) reduce the time and cost of “picking mitigation finance can be denominated in the key unit winners” or selecting funding recipients; 2) determine of interest: tons of emissions reduced. the level of funding needed to generate mitigation results without crowding out private investment; 3) Rapid progress toward achieving NDCs requires that leverage private investment, thus avoiding overreliance limited public funding must unlock large volumes on public resources; and 4) ensure that projects of private investment. Public climate finance has receiving funding deliver lasting results. failed to leverage significant private investment (according to the Organisation for Economic Co- While public funders aim to minimize resources needed operation and Development, the US$81.4 billion of to pick winners, the process of eliciting and reviewing public climate finance flowing from developed to funding proposals can be time consuming, opaque, developing countries in 2013 and 2014 mobilized and costly. Funders have to choose which projects to only US$29.5 billion in private capital) and can even support based on often-competing selection criteria, act as a deterrent to innovation.6 Instead, climate leading to politically fraught and lengthy selection auctions employ results-based payments, providing a processes. Climate auctions resolve this challenge steady stream of revenues, thus allowing developers using competitive tendering to transparently allocate to attract additional lower-cost commercial finance. funding to the projects that can reduce emissions at the This not only lowers the required outlay of public lowest price. As with renewable energy auctions, these finance but can also significantly lower the abatement auctions can be designed to take place online over the cost of capital-intensive projects by reducing overall course of hours as opposed to the weeks, months, and costs of capital. Additionally, competitive tendering sometimes years required to allocate funding in the can incentivize private sector innovations and cost current system. reductions, further reducing the required public funding needed to make a project bankable. i Public funders include both international funders such as bilateral development agencies and multilateral climate funds, as well as domestic sources such as climate and environment funds. 4 | THE WORLD BANK WHY CLIMATE AUCTIONS Finally, public funders must ensure that projects PROJECT DEVELOPERS AND deliver lasting results. Funders want projects to be COMMERCIAL ENTITIES successful, but the prevailing international climate Project developers and commercial entities assessing finance model is for donor countries (acting via mitigation opportunities must realize a favorable risk- bilateral agencies or multilateral climate funds) to return profile before deciding to invest.9 Particularly disburse funds based on complex grant applications in developing economies, climate projects often face with no guarantee that the intended climate results barriers to investment due to their high (perceived) will materialize. When funders allocate grants prior to risk, uncertain returns, or capital intensity that entails project completion, they must conduct due diligence long payback periods.10 While up-front grants lower to understand and mitigate risks that projects won’t the capital cost of projects, they often stop short of deliver intended results.7 Funders also want projects addressing the revenue risk that makes many projects to become commercially viable and outgrow reliance unviable. At a minimum, climate auctions’ results-based on public funding. In up-front grant-based systems, payments provide the revenue certainty commercial public funders often find themselves in the position developers need to make projects bankable. A of providing continued funding if they wish to see commercial developer holding a price guarantee from continued mitigation. Climate auctions, by providing a public fund (see next section for mechanics) can take results-based payments, address this challenge.8 this to a bank as collateral to secure up-front financing, Auction winners cannot redeem their price guarantees just as it does with power purchase agreements in the until their project’s successful results are verified, case of renewable energy projects. which reduces delivery risk for funders. Auctions also help build carbon market infrastructure, both by The procedure for securing public subsidy via a climate developing a pipeline of projects and a stable demand auction can also be far more transparent and less signal over time. As these markets are established, bureaucratic than up-front grant and concessional with sufficiently high and stable carbon pricing, public loan processes. Commercial project developers have funders can phase out their support and instead allow a simple, clear set of requirements to receive their the market to take over the role of incentivizing low- performance-based payment upon project completion. carbon investment. In addition, where a competitive market for emission reductions exists, climate auctions offer potentially higher returns by providing the option to sell to the market.   CLIMATE AUCTIONS | 5 WHY CLIMATE AUCTIONS EXHIBIT 1 How Climate Auctions Resolve Policy, Funding, and Investment Challenges PROJECT DEVELOPERS NATIONAL PUBLIC FUNDERS AND COMMERCIAL POLICYMAKERS ENTITIES Challenges of Current Objective Climate Auctions Solution System Achieve • Complex process • Auctions develop a pipeline of bankable projects mitigation for developing and implementing project • Auctions utilize existing market infrastructure to results rapidly achieve results pipelines in line with NDCs Ratchet up • Difficulty introducing • Auctions provide direct support for mitigation to climate ambition carbon pricing ease transition to regulation through effective • Auctions offer the learning opportunity to carbon pricing strengthen carbon market infrastructure Minimize • Reliance on time-intensive, • Transparent and competitive auctions award resources costly processes for funding to projects that deliver emission needed to pick selecting projects reductions at least cost winners Determine the • Subsidy determined via • Auctions reveal the minimum amount of finance inefficient negotiation required to make a project viable right level of subsidy • Subsidy can crowd out private investment • Poor public/private • Results-based payments de-risk investments, Leverage leverage ratio crowding in commercial finance private investment • Competitive auctions can help drive down abatement costs, lowering the required subsidy over time • No guarantee public • Results-based payments ensure public funding is funding achieves impact disbursed only if emission reductions are achieved Ensure project delivers results • No assurance commercial • Auctions develop a pipeline of projects and investments continue in stabilize demand for a carbon market, enabling absence of public funding countries to move away from public funding Realize • Grants lower investment • Results-based payments provide steady revenue favorable risk- costs, but do not lower risk and allow developers to attract commercial finance return profile or increase returns 6 | THE WORLD BANK HOW CLIMATE AUCTIONS WORK As a market-based and transparent approach to Exhibit 2 illustrates how climate auctions work: allocating public climate finance, climate auctions offer 1. International and/or national public funders (including a cost-effective and low-risk alternative to traditional bilateral development agencies, multilateral climate grants and loans. Climate auctions provide project funds, and national climate or environment funds) developers and commercial entities a guaranteed allocate funding to the auction facility.ii Public price for emission reductions or carbon credits funders do not disburse funding up front, but rather generated from clean technologies. These price commit to pay a fixed price per ton of carbon dioxide guarantees (essentially a contract between a project equivalent upon verification of emission reductions. developer and a public funder) guarantee both a buyer and a fixed price for emission reductions. While 2. The auction facility, which may be hosted by a the public funder acts as a buyer of last resort, project national government or by an international institution, developers also have the option to sell emission then holds an auction. Through competitive bidding, reductions to the market (in cases where a national or project developers and commercial entities international market for emission reductions exists), compete to receive a share of the funding, thus therefore minimizing reliance on public resources; revealing the minimum price at which they can in fact, if project developers sell credits to the deliver emission reductions. Auction winners pay a market, public resources can be redirected to other premium price to receive price guarantees, which climate initiatives, thus catalyzing several projects or provide the right but not the obligation to redeem outcomes with the same funds. emission reductions at a fixed price. This premium can be used to administer the facility, and/or used to expand the size of the subsidy program. 3. Auction winners then develop mitigation projects, generating third-party verified emission reductions. If the project succeeds in generating emission reductions, the project developer can either (a) sell the emission reductions to the market (if the market price exceeds the guaranteed price) or (b) sell to the auction facility (if the market price remains below the guaranteed price). If the project does not produce verified emission reductions the project developers could (c) sell the price guarantee to other project developers and commercial entities. ii This funding does not need to be transferred to the auction facility upon signature of the contribution agreement but can rather be contributed in arrears at the point of redemption. CLIMATE AUCTIONS | 7 HOW CLIMATE AUCTIONS WORK EXHIBIT 2 The Climate Auction Model: A Three-step Process 1 3A Project produces verified emission reductions AND the carbon market price exceeds the guaranteed price INTERNATIONAL DONORS and/or AUCTION NATIONAL FUNDS CREDIT BUYER WINNER capitalize the auction facility 3B Project produces verified emission reductions AND the 2 guaranteed price exceeds the carbon market price AUCTION FACILITY AUCTION AUCTION hosts auctions and allocates price WINNER FACILITY guarantees to auction winners 3C Initial project fails to produce verified emission reductions AUCTION FACILITY AUCTION PROJECT OR WINNER DEVELOPER CREDIT BUYER Finance Price Guarantees Verified Emission Reductions 8 | THE WORLD BANK HOW CLIMATE AUCTIONS WORK The climate auction model can be adapted and emission reductions from waste and US$1.80/tCO2e simplified for various country contexts. For example, for nitrous oxide emission reductions from chemical where a carbon market does not exist, auctions can and fertilizer plants. In total, the auctions attracted still allocate price guarantees, but these guarantees 50 project developers and commercial entities from would not offer the option to sell to the market. 23 countries, demonstrating the effectiveness of the Similarly, the auction facility may choose to remove the approach in catalyzing private finance for mitigation. tradability of price guarantees, meaning that auction winners would not sell guarantees to other project At a domestic level, the United Kingdom’s Contracts developers or commercial entities. for Difference (CfD) programme has used a similar approach to support low-carbon energy technologies. Climate auctions are a relatively new instrument but Whereas climate auctions disburse price guarantees have a proven track record. At the international level, for carbon credits, CfD offers low-carbon generators the World Bank’s Pilot Auction Facility for Methane a “top-up” between the market electricity price and a and Climate Change Mitigation (PAF) allocated nearly minimum power price determined through an auction. US$54 million in climate finance to mitigate up to 21.6 For each CfD auction, the UK government sets a MtCO2e over three climate auctions held between July budget for each “pot,” and only technologies within 2015 and January 2017. Supported by funding from the same pot compete, ensuring that less mature Germany, Sweden, Switzerland, and the United States, technologies receive support and move down the the PAF was designed to stimulate private finance cost curve. As of January 2019, CfD has hosted two flows to projects reducing methane and nitrous oxide auctions rounds, which issued contracts to over 5 GW emissions in developing countries. The PAF auctions of low-carbon power capacity. iii,11 resulted in a net benefit of US$2.10/tCO2e for methane iii Similarly, Australia has utilized auctions to purchase emission reductions through its AU$2.55 billion Emissions Reduction Fund. While this scheme differs from the auction model described above, including that it offers purchase agreement contracts instead of price guarantees, it is notable that the Australian Government has contracted for significant abatement—193 MtCO2e at an average price of AU$12/tCO2e as of December 2018—through an auction mechanism. CLIMATE AUCTIONS | 9 WHERE CLIMATE AUCTIONS WORK With a track record in cost-effectively supporting 3. A successful auction requires competition among renewable energy, methane, and nitrous oxide commercial actors willing to pursue mitigation projects, climate auctions have the potential to projects.v Auctions can be designed to enhance support a range of additional mitigation activities. competition (e.g., by broadening project eligibility) In considering climate auctions as a tool to meet or can be complemented by awareness-raising NDC targets, national policymakers should take into and capacity-building measures targeting potential account the conditions under which climate auctions bidders prior to issuing the tender to increase work most effectively: participation in the auction. 1. Because payments are disbursed only after a 4. Climate auctions should generally target activities with project produces verified emission reductions, the high (long-term) abatement potential. Targeting these ability to effectively monitor, report, and verify high-emission activities could have several benefits, (MRV) climate outcomes is a mandatory condition including better distributing the administrative costs of for utilizing climate auctions.iv Initially, selection of the auction facility, and leveraging cost reductions and appropriate activities can draw on accepted MRV learning in key sectors. frameworks established under existing offsetting programs (the Clean Development Mechanism Finally, climate auctions can have a high impact in [CDM], Verified Carbon Standard [VCS], Gold sectors covered by carbon markets. Competitive Standard, etc.). As national MRV capabilities are carbon markets allow auction winners to sell emission built, the auction model can also extend to reduce reductions to the market instead of redeeming their price emissions from activities thus far underrepresented guarantees, saving the auction facility from disbursing in offsetting schemes. public funds. With strong enough carbon prices, carbon markets also can act as a natural sunsetting mechanism 2. Climate auctions are most effective where for public support. However, it is important to note insufficient or uncertain revenue is the key barrier the existence of a carbon market is not necessary to commercial investment. The climate auction for climate auctions. Even in the absence of a carbon model leverages commercial investment by reducing market (i.e., in the case where the auction winners would revenue risk—closing viability gaps and providing always sell emission reductions to the auction facility), the revenue certainty investors may need to access climate auctions still offer the most cost-effective means commercial lending. However, it may not be suitable for achieving mitigation outcomes. for activities that face institutional or technical barriers, or activities characterized by high uncertainty in future costs (e.g., projects with uncertain operating costs such as large-scale biomass projects with unpredictable future fuel costs). iv This brief focuses on climate outcomes (i.e., tCO2e) as the result to trigger payment disbursement. However, climate auctions may allocate finance on the basis of other metrics (e.g., reduction in energy usage per square meter of building space). v Some activities that inherently have less competition (e.g., natural monopolies in electricity transmission or public transport) are therefore generally not suitable for climate auctions. 10 | THE WORLD BANK WHERE CLIMATE AUCTIONS WORK Given the four conditions outlined above, the table below presents a menu of NDC implementation activities that would likely be suited to climate auctions. These activities represent those most likely to attract commercial interest in emerging economies, most often prioritized in countries’ NDCs, and most likely to achieve significant abatement potential.vi,12 vi To generate this selection, an initial list of activities was developed by assessing the projects registered using existing CDM and VCS methodologies. This approach narrowed the landscape of mitigation activities to those with easily implemented MRV frameworks and those likely facing a revenue gap as the barrier to investment. This list was then further narrowed by qualitatively assessing the extent of private sector participation, which removed activities typically undertaken by natural monopolies. Finally, the remaining subset of mitigation activities was evaluated against the investment potential in emerging economies, the priority areas identified in developing countries’ NDCs, as well as the abatement potential as outlined in the latest IPCC assessment report. CLIMATE AUCTIONS | 11 WHERE CLIMATE AUCTIONS WORK EXHIBIT 3 NDC Implementation Activities Suited to Climate Auctions Activity Rationale for auction suitability Buildings • Green buildings represent a significant abatement and New green residential buildings investment opportunity in rapidly growing economies experiencing high rates of urbanization. The buildings sector is identified as a focus area in 74 NDCs. • To achieve adequate private sector participation and scale of investment needed to minimize transaction costs, auctions could target real estate developers in urban areas.13 Industry • Industry is the second-largest source of direct GHG Waste heat recovery in industrial plants emissions, with energy-related industrial emissions (e.g., steel, cement) representing the largest abatement potential. Industry is identified as a focus area in 147 NDCs. Fuel switching to renewable sources for self-consumption in industrial plants • Given the heterogeneity of industries, auctions may (e.g., steel, cement, pulp and paper, refineries, aluminum) need to be industry specific. Therefore, countries with large industries could target one specific Energy efficiency measures in industrial plants application in a climate auction. (e.g., steel, cement, pulp and paper, refineries, aluminum) Clinker substitution in cement facilities • High mitigation potential given the global warming potential of nitrous oxide. Nitrous oxide (N2O) reduction in nitric acid production facilities Power • The power sector represents the largest source of Utility-scale renewable electricity emissions in most countries and is identified as a (wind, solar PV, CSP, geothermal) priority area in 138 NDCs. Decarbonizing the power sector can also lower emissions in other end-use sectors (e.g., transport). • While currently, renewable energy auctions award results-based payments for electricity generated ($/ kWh), the climate auction model awarding payments for emission reductions can also be used to incentivize clean power investments. Transport • Due to rapidly growing demands for transport Fuel efficiency improvements for road transport services in developing countries, the sector has high mitigation potential. Transport is identified as a focus Fuel switching (biofuels or electricity) for road transport area in 147 NDCs. • Auctions could be aimed at commercially owned fleet operators in order to achieve adequate competition levels and reduce costs associated with MRV. Waste • The high global warming potential of methane offers Landfill waste to energy high mitigation potential, and urbanization trends are (Landfill gas to energy, municipal solid waste to energy) placing greater pressure on developing sustainable waste management systems. Waste is also identified Wastewater methane capture to energy as a focus area in 149 NDCs. Landfill composting • Waste projects, particularly landfill waste to energy, have a strong proven track record in the PAF. 12 | THE WORLD BANK CONCLUSION This policy brief has sought to provide information for climate auctions transparently allocate public finance countries wishing to take advantage of this efficient to the most cost-competitive mitigation projects, policy tool by explaining the mechanics of climate thereby ensuring greater climate impact of scarce auctions, the general conditions under which they public funds. At the same time, climate auctions work best, and the kinds of mitigation activities for help strengthen carbon market readiness—including which they are particularly well-suited. through the development of MRV frameworks, by stabilizing carbon prices in nascent markets, or by Climate auctions represent an innovative tool to spur building capacity of project developers to undertake private investment in low-carbon activities in the mitigation activities. In doing so, climate auctions can near term, while laying the groundwork to mobilize act as a transition tool to establishing the regulatory finance at the scale and pace needed to meet longer- frameworks that can enable achievement of more term climate and development goals. In particular, ambitious, self-sustaining climate outcomes over time. CITATION AND RIGHTS Rights and permissions © 2019 International Bank for Reconstruction and The material in this work is subject to copyright. Development / The World Bank Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in 1818 H Street NW whole or in part, for noncommercial purposes as Washington DC 20433 long as full attribution to this work is given. 202-473-1000 www.worldbank.org Suggested citation: World Bank, 2019. Climate Auctions: A Market-Based This work is a product of the staff of The World Approach to National Climate Action. World Bank, Bank with external contributions from Rocky Washington, DC. Mountain Institute. Rocky Mountain Institute— an independent nonprofit founded in 1982— transforms All queries on rights and licenses should be global energy use to create a clean, prosperous, addressed to the Publishing and Knowledge and secure low-carbon future. The findings, Division, The World Bank, 1818 H Street NW, interpretations, and conclusions expressed in this Washington, DC 20433, USA; fax: 202-522-2625; work do not necessarily reflect the views of The e-mail: pubrights@worldbank.org. World Bank, its Board of Executive Directors, or the governments they represent. Cover photo istockphoto.com The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. CLIMATE AUCTIONS | 13 ENDNOTES 1 4 Planning for NDC Implementation Quick Start Guide “Clean Development Mechanism: Designated and Reference Manual, The Climate Development National Authorities,” UN Framework Convention on and Knowledge Network, 2016, https://www.cdkn. Climate Change, accessed December 17, 2018, https:// org/ndc-guide/wp-content/uploads/2016/12/Quick- cdm.unfccc.int/DNA/index.html; Good-Bye Kyoto: Start-Guide-final-pdf.pdf; H. de Coninck, A. Revi, Transitioning away from Offsetting after 2020, Carbon M. Babiker, P. Bertoldi, M. Buckeridge, A. Cartwright, Market Watch, 2017, https://carbonmarketwatch.org/ W. Dong, J. Ford, S. Fuss, JC. Hourcade, D. Ley, wp-content/uploads/2017/04/Good-bye-Kyoto_ R. Mechler, P. Newman, A. 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Matthews, Y. http://www.oecd.org/environment/cc/Climate- Chen, X. Zhou, M. I. Gomis, E. Lonnoy, T. Maycock, finance-from-developed-to-developing-countries- M. Tignor, T. Waterfield (eds.)]. In Press. https://www. Public-flows-in-2013-17.pdf. ipcc.ch/site/assets/uploads/sites/2/2018/11/SR15_ 7 Chapter4_Low_Res.pdf; Shelagh Whitley, Marigold “Project Preparation,” Green Climate Fund, accessed Norman, and Nella Canales Trujillo, Mobilising private December 19, 2018, https://www.greenclimate.fund/ climate finance in lower-income countries, 2016, gcf101/funding-projects/project-preparation. https://www.odi.org/sites/odi.org.uk/files/resource- 8 documents/10535.pdf. 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(2014). Climate Change 2014, Mitigation of Climate Change (WGIII). In Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge, UK; New York, NY: Cambridge University Press. 13 Study on using the climate auction model to catalyse energy and resource efficient buildings, Carbon Trust and The World Bank, https://www.pilotauctionfacility. org/sites/paf/files/24684_Climate Auction Mechanism_Web.pdf. CLIMATE AUCTIONS | 15 MOUN KY TA ROC IN IN STIT UTE 1818 H Street NW 22830 Two Rivers Road www.pilotauctionfacility.org Washington, DC 20433 USA Basalt, CO 81621 USA www.worldbank.org www.rmi.org